S.Korea names budget veteran as finance minister to prop up economy

South Korean President Lee Jae-myung on Sunday appointed Koo Yoon-cheol, former head of the budget office, as finance minister as the government is trying to revive Asia’s fourth-largest economy with extra spending.

Lee also named Kim Jung-kwan, president of major power plant builder Doosan Enerbility Co., and veteran energy sector bureaucrat, as industry minister.

Koo was the second vice minister of Economy and Finance, who led the government spending policy from 2018 to 2020 after serving as the head of the ministry’s budget office in 2017. He was the Minister of the Office for Government Policy Coordination from 2020 to 2022.

"I feel a heavy sense of responsibility in taking on such an important role during a critical time, but I also have a strong passion to overcome this crisis," Koo told The Korea Economic Daily in a telephone interview.

"We cannot overcome the current crisis with only the existing mid- to long-term measures. I will review each short-term item individually – such as economic recovery, crisis management, and public safety – and based on that, build a long-term, ultra-innovative economy."

South Korea’s new administration proposed an additional 20.2 trillion won ($14.6 billion) extra budget earlier this month to stimulate domestic demand as pro-spending advocate Lee was sworn in as the country’s president.

Earlier this month, the Bank of Korea nearly halved its 2025 economic growth forecast to 0.8% from its previous projection of 1.5% and cut its 2026 forecast to 1.6% from the prior 1.8%.

BEYOND BUDGET

Koo expressed confidence in his ability to address other sectors as well, saying he has managed other policies.

“I also handled various responsibilities in tax policy, foreign investment, and policy coordination,” he said.

Koo presented 11 national strategies, such as economic innovation through artificial intelligence (AI), spanning the political, administrative, economic, and social sectors. These strategies aim to develop more South Korean companies into global leaders. Currently, the country is home to the world’s two largest memory chip makers – Samsung Electronics Co. and SK Hynix Inc.

Koo, who authored a book titled “AI Korea” released earlier this month, emphasized economic innovation through technology, among the strategies.

“Through the AI transformation, the government, including all ministries, as well as businesses and citizens, must transition into an AI-driven economy.”

South Korea can be the global leading country to apply AI to real industries, although the nation lags behind the US and China in the development of large language models, Koo said.

“With Korea’s industrial infrastructure spanning semiconductors, machinery, chemicals, shipbuilding, and more, we are well-positioned to apply AI not just to industry, but across all fields, including administration and welfare.”

FIRST INDUSTRY MINISTER WITH NUCLEAR POWER PLANT CAREER

Kim is expected to become the first-ever Minister of Trade, Industry and Energy with a career in the nuclear power plant industry.

Given his nomination, the government is expected to pursue a more balanced energy policy that includes both renewable energy and nuclear power, rather than continuing the nuclear phase-out, nuclear power industry sources said.

“I understand that nominating me, a nuclear expert, indicates that the government will not pursue a nuclear phase-out,” Kim said.

Kim was known to have played a significant role in a $19 billion nuclear project in the Czech Republic won by South Korean companies.

He joined plant and machinery powerhouse Doosan Group in 2018 and has managed Doosan Enerbility’s exports of gas turbines and global cooperation on small modular reactors (SMRs) since 2022.

Doosan Enerbility’s share prices nearly tripled from 2022 to 2025 as its gas turbine order backlogs surged when he managed the business.

Before joining the group, Kim worked at the finance ministry and the central bank.

“During my time as a bureaucrat, I often questioned why policies failed to function effectively in the real economy,” Kim told The Korea Economic Daily. “I will work to create policies that help businesses and industries,”

Among other ministerial positions, Lee named Jeong Eun-kyeong, the former head of South Korea's disease control agency, as health minister.

Jeong was highly praised for her response to the COVID-19 pandemic, becoming one of Time Magazine's 100 most influential people of 2020.

Write to Yeong-Hyo Jeong, Dae-Hun Kim and Kwang-Sik Lee at hugh@hankyung.com
 
Jongwoo Cheon edited this article.